The Migration Observatory, a unit based at Oxford University, has flagged up some research alongside the MAC report says EEA workers in the UK make an above-average contribution to the national finances.

MigrationObservatory (@MigObs)

Published with MAC report: fiscal analysis finding that average EEA adult contributed £2,300 more to UK public finances than the UK average in 2016/17; each extra EEA migrant will make average net contribution of approx £80,000 over their lifetime pic.twitter.com/01hlA0r1u6

Fiscal study finds 2016 migrant cohort will make lifetime net contribution of £27.4 billion to public finances, approx equivalent to additional revenue in 1 year from adding 5p to all three income tax rates. pic.twitter.com/NFpFPbSAoR

‘Break-even’ point for fiscal contribution of migrants depends massively on where they are in the life cycle. 20-year old with no kids becomes net contributor above approx £10k income, but ten years later if s/he has partner + 2 kids, requires £45k to be net contributor pic.twitter.com/juQX3qfnYb

Diane Abbott, the shadow home secretary, has issued this statement on the migration advisory committee’s report.

Ministers have said they will listen to the evidence on immigration. This would be a new departure for them, so they should not ignore the independent MAC report.

Labour has said that our immigration policy needs to be based on our economic needs, while meeting our legal obligations and treating people fairly – which means ending the discrimination against non-EU migrants, especially from the Commonwealth. This is not what we get from the Tories, the party of bargaining chips, Go Home vans, and the hostile environment.

Abbott is right to say Labour’s stance on a “hostile environment” immigration policy is different from the government’s.

MAC assessment of impact of EU migrant workers on life in UK

This chart from the migration advisory committee report is very useful. It sets out its conclusions as to what impact EEA immigration (ie, EU immigration, plus Norway, Iceland and Liechtenstein) has had in a wide range of areas. The table is in the report (pdf) on pages 108 and 109.

Fall in sterling after Brexit vote has done more to make people poorer than immigration, says MAC

Here are some key points from the foreword to the migration advisory committee’s report from its chairman, Prof Alan Manning.

Manning says the impact of migration overall has been modest and that the fall in the value of the pound after the Brexit vote has had a bigger impact on living standards.

While we do think that EEA migration has had impacts, many of them seem to be small in magnitude when set against other changes. The fall in the value of the pound after the referendum vote to leave the EU probably raised prices by 1.7 per cent - this is almost certainly a larger impact than the effect on wages and employment opportunities of residents from all the EEA migration since 2004, although over a different time period.

The small overall impacts mean that EEA migration as a whole has had neither the large negative effects claimed by some nor the clear benefits claimed by others. There are ways in which migration policy could be changed to increase the benefits and reduce the costs and our policy recommendations focus on what we believe these changes should be.

He says that, although free movement does not always cause problems, the MAC would not recommend it as policy for after Brexit.

If – and this is not a MAC recommendation – immigration is not to be part of the negotiations with the EU and the UK is deciding its future migration system in isolation, we recommend moving to a system in which all migration is managed with no preferential access to EU citizens.

This would mean ending free movement but that would not make the UK unusual – for example, Canada has an open, welcoming approach to migration but no free movement agreement with any other country. The problem with free movement is that it leaves migration to the UK solely up to migrants and UK residents have no control over the level and mix of migration. With free movement there can be no guarantee that migration is in the interests of UK residents. This does not mean that free movement is guaranteed to cause problems – that likely depends on the level and mix of the migration flows that result. Free movement was not a political issue prior to 2004 when EU migration was relatively low. The flows are now falling sharply and there are some reasons to think those falls will continue in the near future. The UK may find itself in the position of ending free movement just as public concern falls about the migration flows that result from it.

He says offering concessions on immigration could be useful in the Brexit negotiations, but that the MAC is not recommending this.

We do not express a view on whether immigration should be part of the EU negotiations. The biggest gainers from migration are often the migrants themselves so preferential access to the UK labour market would be of benefit to EU citizens, potentially something of value to offer in the negotiations. We are not in a position to evaluate what might be on offer in return or to assess how absolute is the commitment of the EU to the principle of free movement.

He says the MAC recommends a system that makes it easier for higher-skilled workers to come to the UK than lower-skilled workers, but that EU and non-EU workers should be treated the same. (The report refers to European Economic Area workers, not EU workers - ie, the EU, plus Norway, Iceland and Liechtenstein - but I am using EU here and elsewhere for clarity.)

If the UK is in a position where it is deciding the main features of its immigration policy our recommendation is that there should be a less restrictive regime for higher-skilled workers than for lower-skilled workers in a system where there is no preference for EEA over non-EEA workers. Higher-skilled workers tend to have higher earnings so make a more positive contribution to the public finances. The estimated labour market impacts, though small, also suggest that higher-skilled workers are of greater benefit as do any impacts on productivity and innovation. A shift towards higher skilled migration aligns with the Government’s industrial strategy published last year.

He calls for the cap on the number of skilled workers admitted through the tier 2 system to be lifted.

We recommend that the cap is abolished – it creates uncertainty among employers and it makes little sense for a migrant to be perceived as of value one day and not the next which is what inevitably happens when the cap binds.

He says work permits should not be issued to lower-skilled workers.

For lower-skilled workers, we do not see the need for a work-related scheme with the possible exception of a seasonal agricultural workers scheme; as that labour market is totally distinct from the labour market for resident workers. This does not mean there would be no supply of low-skilled migrant workers – most of the existing stock would remain and there would likely be a continued flow through family migration or the existing youth mobility scheme. We know that some sectors will lobby intensively against this proposal. If there is to be low-skilled work route we do not think it should be based around sectors: an extended youth mobility scheme would be preferable, as is suggested in the government white paper published in July.

He says the MAC is “seriously concerned” about social care, but that this needs more than just a migration fix.

We are seriously concerned about social care but this sector needs a policy wider than just migration policy to fix its many problems. This is one illustration of a more general point, that the impacts of migration often depend on other government policies and should not be seen in isolation from the wider context.

Migration advisory committee says EU workers should not get preferential access to UK after Brexit

Dan Sabbagh

Free movement from the European Union should end after Brexit and the UK should embrace a Canada-style system in which there is no preferential access to the British labour market for EU or the citizens of any other country, according to the government’s migration advisory committee (MAC).

The MAC report, which is intended to advise ministers on how to proceed after Brexit, concedes it may not be possible to achieve country-neutral system because the UK may not have an entirely free hand in determining migration policy after the UK leaves because the final policy will be subject to exit negotiations with the EU.

But it concludes that if “immigration is not to be part of the the negotiations with the EU and the UK is deciding its migration system in isolation, we recommend moving to a system in which all immigration is managed with no preferential access to EU citizens”.

It said the model would be akin to Canada which has “an open, welcoming approach to migration but no free movement agreement with any other country.”

The MAC was set up by Amber Rudd when she was home secretary to inform the UK’s migration policy after Brexit and is designed to inform a forthcoming white paper that has repeatedly been delayed but is due this autumn.

EU citizens have, until now, been able to enter the UK freely, seeking work on arrival, and concerns about the impact of free movement is considered to be one of the central reasons why the country voted for Brexit, but the report is likely to strengthen the hand of those who wanted to take a tough stance in Britain’s Brexit negotiations.

The MAC report says that there has a been small impact on wages and employment in the UK, arguing it has thad “neither the large negative affects claimed by some, nor the benefits claimed by others”.

But it also argues that because “the biggest gainers from migration are often the migrants themselves” British ministers should see preferential access to the UK labour market as “something of value to offer in the negotiations” with the EU over the UK’s exit.

Any future policy determined by the UK should favour higher skilled workers over lower skilled ones, the MAC advises, and says there should be no sector specific migration schemes except possibly for one to supply seasonal labour in agriculture.

Ahead of a meeting with Michel Barnier, Gernot Blümel, Austria’s EU minister, responding to Dominic Raab’s in an interview with European newspapers in which he called for the union to compromise (see 9.34am), said:

The reality is that the UK must find a way forward. The EU has done so, EU27 have a clear position and 80% of the departure treaty has been agreed.

Raab tells EU it's their turn to compromise in Brexit talks

Dominic Raab, the Brexit secretary, has given a joint interview to journalists from various European papers, including Germany’s Die Welt, France’s Le Monde and the Irish Times, ahead of the informal EU Salzburg summit starting tomorrow. In it, he said it was the EU’s turn to compromise. He said:

We’ve made the compromises and we showed the ambition and we do need to see that matched on the EU side. So Salzburg is an informal EU summit but it will be an important milestone, a stepping stone if you like, to show that we’ve actually got the contours of agreement on principles to continue the final weeks of these negotiations and hammer out the details.

In the interview Raab restated the government’s view that the EU plan for the Irish backstop (a last-resort plan to avoid a hard border in Ireland after Brexit, if other elements in the deal don’t achieve that) was unacceptable. But he said the UK would consider new ideas from the EU.

What I’m not going to do is to say that I would refuse to entertain any further proposals that the EU comes up with but they’ve got to be respecting the equities that we’ve set out.

He also said the government would not “facilitate” a referendum on the final Brexit deal and that, even if people wanted one, there was not enough time for it to happen.

Even if that’s what people want to do, it’s difficult to see how it could be done in time, and we wouldn’t facilitate it.

That meant, if the Commons were to reject the Brexit deal, the UK would be heading for a no deal Brexit, he said.

In reality, if we got to the situation where we had a deal and it was voted down ... you would risk tripping up into the no-deal scenario because there would be such a tight timeframe.

EU officials in Brussels have been briefing on the upcoming summit in Salzburg.

On Brexit, one of the two main subject matters, along with migration, Theresa May will make her comments on Wednesday evening.

The 27 will gather on Thursday for a lunch at which Michel Barnier, the EU’s chief negotiator, will give his assessment of the negotiations.

The central focus of the discussions will not be whether or not the EU needs to compromise to get a deal. The discussion will be whether they should be vague and aspirational in the political declaration simply to get agreement with the UK, and avoid the “catastrophe” of a no deal Brexit.

There is also acknowledgement that the EU needs something “on paper” by October on the political declaration if it is to get the deal done in time to allow ratification in Westminster and the European parliament.

An extraordinary November summit on Brexit will be proposed in Salzburg, as revealed last week by The Guardian. That will serve to wrap up the loose ends, of which there could be many.

The Brexit talks are moving towards their climax (or their first climax - if, as seems possible, the UK leaves with a version of a “blind Brexit”, we’ve got another 21 months of negotiations to cover) and today’s Guardian splash has a headline, based on an EU briefing, that captures some of the drama.

Talking of climaxes, Sir Vince Cable, the Lib Dem leader, will use some fruity language to attack Brexiters when he delivers his keynote speech at the end of the Lib Dem conference this afternoon. He will says that Tory leavers are getting an “erotic spasm” from Brexit.

For the ‘true believers’ – the fundamentalists – the costs of Brexit have always been irrelevant.

Years of economic pain justified by the erotic spasm of leaving the European Union.

Economic pain felt – of course – not by them by those least able to afford it ...

The public don’t mind what these people dream about behind closed doors – so long as their dreams don’t become nightmares for the rest of us. It really beggars belief that the army and the police are now being asked to prepare for riots in the chaotic aftermath of a botched Brexit.

We will meet over lunch at 27 with our chief Brexit negotiator, Michel Barnier. With only six months to go before the United Kingdom’s withdrawal from the EU, we are entering the final weeks of negotiations. Therefore, I want us to review progress in these talks and to discuss the way forward with three objectives in mind.

First, we should reach a common view on the nature and overall shape of the joint political declaration about our future partnership with the UK.

Second, we will discuss how to organise the final phase of the Brexit talks, including the possibility of calling another European council in November.

Third, we should reconfirm the need for a legally operational backstop on Ireland, so as to be sure that there will be no hard border in the future. Let me recall that limiting the damage caused by Brexit is our shared interest. Unfortunately, a no deal scenario is still quite possible. But if we all act responsibly, we can avoid a catastrophe.

Here is the agenda for the day.

10am: The migration advisory committee publishes its final report on EU migration to the UK. Prof Alan Manning, the MAC chair, will hold a press briefing.

As usual, I will also be covering breaking political news as it happens, as well as bringing you the best reaction, comment and analysis from the web. I plan to post a summary at lunchtime and another when I wrap up, probably at around 5pm.

I try to monitor the comments BTL but normally I find it impossible to read them all. If you have a direct question, do include “Andrew” in it somewhere and I’m more likely to find it. I do try to answer direct questions, although sometimes I miss them or don’t have time.

If you want to attract my attention quickly, it is probably better to use Twitter.